Crude oil has reversed direction with Brent crude gaining 66 cents on Friday’s closing level
16 November 2020
Near futures gas contracts for the remaining winter months recorded gainsAn early supply surplus on the UK gas system was eroded as demand increased slightly over the course of the day. Wind generation, which had been running above 10GW for most of the week, fell below that level on Friday morning, requiring more gas-fired plant to come online. The prompt market saw gains as demand began to increase with lower temperatures and lower wind generation forecast for this week expected to push demand higher. The day ahead contract gained 1.05p while week ahead for this week was up 0.60p. Near futures gas contracts for the remaining winter months recorded gains averaging 0.58p on Friday but seasonal contracts along the curve were little changed in either direction.
GB baseload power futures reversed direction again on FridayGB baseload power futures reversed direction again on Friday, recording modest gains across the curve as carbon prices strengthened again. Power price movement continues to track the UK gas market closely, but carbon price movement is having a stronger influence of late as gas prices remain subdued. The day ahead contract shed £4.65/MWh despite forecast lower wind generation for today and the rest of this week. Demand remains below seasonal norms due to mild weather and reduced industrial and commercial demand as a result of Covid restrictions.
Gains from the oil price rally of early last week were further eroded on Friday but the global benchmark, Brent crude, was still $3.33 a barrel higher week-on-week. Having eased by 73 cents on Thursday, Brent shed another 75 cents on Friday to finish the week at $42.78 a barrel. The U.S. benchmark, West Texas Intermediate, fell by a similar amount to settle $40.30 a barrel. The reversal of the upward trend came as more stringent Covid restrictions came into force in Europe and some U.S. states and was further abetted by increased Libyan exports and increased U.S. drilling activity last week. Carbon prices reversed Thursday’s losses to trade above €26.00 again.
Gains from the oil price rally of early last week were further eroded on Friday